Gokarn: IIP data not the only indicator of economic situation

Reserve Bank of India Deputy Governor Subir Gokarn said that one reading of the Index of Industrial Production Data should not be used to reach a conclusion about a slowdown,but that other variables too need to be taken into account

Reserve Bank of India Deputy Governor Subir Gokarn on Friday said that one reading of the Index of Industrial Production Data (IIPD) should not be used to reach a conclusion about a slowdown,but that other variables too need to be taken into account.

As a single indicator of growth activity,it is perhaps a little inadequate at this time. But we have to take a number of other variables into account. We have the Project Management Institute (PMI),our own surveys and corporate analyses. All these indicate that there is a sort of slowing down which we have been saying for quite sometime.

Remarking that one reading of the IIPD would not change the conclusion,Gokarn said he could not comment at the moment on whether the number (3.5 per cent) suggested a much deeper slowdown or not.

I think we need to go back and analyse and also place in the perspective of other indicators that we watch, he said.

Gokarn also said he was looking at mild recovery in growth despite decline in industrial production to 3.5 per cent in March.

Our outlook for the year 2012-13 is for a mild recovery in growth. Our projection in the April policy statement was that the growth for 2012-13 was at 7.5 per cent. In that we expect some bottoming out of this process over the course of the year,he said speaking on Monetary Policy Challenges in a turbulent world organised by the CII Southern Region here.

He said: We have to live with the possibility that the global slowdown… will remain challenging… The good news is domestic growth is balancing and stabilising.